Developing Business Relationships. And Bribing in China.

Posted in Business Culture in China, Cultural Observations. with tags , , , , , on December 8, 2013 by Ben Brown

ben hot pot

Every self-respecting follower of Chinese culture and business has to, at some point, post an article on networking, or “guanxi”.

Ironically, there isn’t a word in Chinese for “Networking” that I’ve been able to find thus far.

Building guanxi means creating close personal relationships with business partners so that you may work together on a higher level of mutually-beneficial trust.

In the US, when we want to do a business deal, we find the best candidates available, approach them with our plan, sit down for a few meetings to discuss terms, hammer out a contract and sign it. Then we begin working together.

This system of doing things exists in China as well, but only as a last-ditch option. Usually, you want to develop a relationship with somebody before they will listen to you. This is because, in Chinese culture and business, strong bonds are formed in the most inner circle of friends. Outside of that circle, there are 1.3 billion “other” people that you cannot trust.

I know of businessmen who lived in China for 20 years and said “You can’t get involved in bribing people. Once you open that door it just gets bigger, and increasing amounts of money are expected to flow through it”. I’ve also met businessmen who lived in China for 20 years and said “You must bribe people if you’re going to do any successful business in China”.

China is a country of contradiction. Both statements above are 100% true. How is this possible?

Those in the “can’t bribe” camp were either in very very large companies that easily created guanxi through possession of a huge brand name or technology that nearly everyone in China wanted to get their hands on. Or they have and use lawyers to walk the razor’s edge of what’s acceptable according to their own country’s laws. Most of the “must bribe” camp ends up represented by smaller businesses who refrain from entering the country out of a negative view of how things operate over here. They also don’t have any guanxi. There are no people willing to help them out based on a strong sense of mutual trust.

There is also “the third possibility”. Western companies entering China form partnerships, or hire consulting firms or advisers, that smooth over issues with local entities. In some cases, these companies artfully explain to the western firm that they will take care of everything. Sometimes this involves leveraging their guanxi to get a small business through the process. Some of the things that transpire may or may not be above board by western standards. But the western company has no idea what’s going on other than the consulting firm has handled all registration efforts with the local government.

So what if you need to develop guanxi quickly?

I have a friend in China, a successful artist. He’s married to a former Olympic diver. About eight months ago his wife held a party for all of her old diving friends. This included a power couple: the husband is now an actor and former Olympic diver. His wife is a famous singer.

My friend, at one point, made a bet for a lot of money over a drinking game common in China. I’ve seen him lose this game a few times, but never for money unless he intended to. The case was the same here. He last a LOT of money. I watched him do it. But when I got home that night and thought about it, I realized the chances of a guy who spent half of his adult life training to be an Olympian probably didn’t spend much time in karaoke bars playing drinking games. It was highly unlikely that he just waltzed in to the evening with the honed skill level required to beat my friend. It was even less likely that my friend would bet that much money unless he expected to lose it.

My friend was, essentially, giving the superstar a gift that would ensure he wouldn’t be forgotten. Later, I assume the superstar referred other wealthy friends to my artist friend to buy paintings for their new office building or home.

Was this a bribe? Or was it an investment? If this happened between a company and a government official I think most westerners would call it a bribe. I think most Chinese people would call it “The way things are here”.

I’m not coming down one way or the other on the subject of bribing. I’m just trying to give my readers a clear understanding of how it works over here. This is what the terrain is like if you decide you’d like to enter this market.

But there is a point in business culture in China where guanxi and building it through bribes will come up. There are also cases where it is never needed. The picture in this blog is me with a group of my oldest friends in China. I’ve never bribed any of these guys, and they’ve never bribed me. This is my inner circle. When I decide to do business in China, I talk to these guys first. They are artists, lawyers, finance gurus and media experts. They are well-established and well-connected. All of them, at one point throughout China’s development, have had to make business deals that would definitely be marked down in the “bribe” category by western standards. I’ve known them since the 90s. We are friends, but that’s where we’ll do business as well. Because we can trust each other.

The single best tool one needs to enter the Chinese market, especially as a small business, is an understanding of the culture. If you want to sign manufacturing agreements for export or enter the domestic retail market, or do business in or with China in any way, you need to understand the culture or you need to find an employee or a business partner or adviser who does. You need to find a way to navigate the terrain without crossing any legal lines in your own country while simultaneously navigating a complicated culture where gifts are the norm between businesses. Dave Howard, owner of Howard Communications Ltd., prompted me to re-write much of this blog because he pointed out that small businesses have less leverage than large corporations due to the lack of lawyers, money and power. I agree with him on this point. My original intention, which was not conveyed, was to point out that small businesses are often afraid to enter the market due to their perception that they’ll be required to take unscrupulous or illegal action to be successful. This is not usually true.

Even large businesses, however, will be more successful if they learn about the culture before plunking themselves down in China. As someone who speaks the language and has been traveling to this country since 1994, I can attest to the complexity of doing business here and the utter importance of knowing as much as possible about how to navigate the landscape from both the western legal perspective and the Chinese cultural structure. A melding of the two is necessary to achieve success.

Over leveraging in China.

Posted in Uncategorized with tags , , , , on December 7, 2013 by Ben Brown

This was one of those “Ah-Ha” moments for me.

Many of you who do business in or with China ask the same question on a weekly or even daily basis of your Chinese counterpart: “Why, WHY are they doing THIS?!”

Sometimes the moves a Chinese company will make may strike you as completely without sense. I can now attest that for the great majority, there is a very clear line of reasoning. I can further attest that it is usually pretty solid reasoning.

The difference lies in the structure of the country’s rules of the game.

In the US, if we want to start a business we start it. Next week I plan to register the first of three companies I’m starting. One will export products to China. One will import products to the US, and a third will offer consulting and management services, on the ground in China. The grand total cost of opening all three of these businesses will be less than $1K USD.

In China, in many cases, you need to show $100K RMB in liquid assets before you are allowed to register just one business. That’s around $18,000 USD. It’s not needed for anything, you just have to have it in savings. Other companies (it depends on what you’re hoping to trade or sell) require a much higher input. In some cases over $100K USD in savings just to get a business license.

That’s just to give you an idea of how much more difficult it is to start and operate a business in China, right from the start.

I noticed over the past year of working for a Chinese company that many, many Chinese businesses are heavily over leveraged. Why? Is it because they can?

No. Not really.

Most businesses with the goal of long-term growth and survival will not choose to over encumber themselves with choking levels of debt. In the west we often talk about Chinese companies borrowing money that they either fail to pay back or pay back extremely late. This does happen with a lot of SOEs.

Private companies are different.

First of all, they are not party-controlled or nearly as heavily party-influenced as SOEs. They don’t have a CEO who also holds a government position of authority that can just call up the head of an SOE bank and resolve issues. Their company pays lip service to the idea of bringing technology into the country and spreading it around, but they are still in business to make money rather than to support the motherland.

Secondly, they still have to put up corporate assets as collateral, and they have to find, usually, a local government entity to guarantee their loan to the bank. That local government entity will want the assets as collateral.

Then, after the purchase has been made, things have to go exactly as planned. Usually the plan was drawn up with the most optimistic scenario in mind. In most cases, those scenarios were never meet-able.

So the local entity will start conducting audits and demanding their money back. This often happens mere months after the transaction has closed.

The private company, meanwhile, has been going to another small government entity in the neighboring town (or eventually in a neighboring province) and offering different assets as collateral. They can then try to use their new pull with a slightly higher-ranking government official to coerce the guarantor of the earlier transaction into sitting tight while the company struggles to turn a profit. If they need to make some payments, some of the loan money from the second transaction can be used to satisfy the parties involved in the first.

The result is a company that has expanded rapidly through lending aimed at reaching profit margins that were probably never attainable. The hope is that eventually they will start turning a profit and become competitive enough to expand further, creating JV agreements with foreign entities and possibly even buying western companies.

Once a private firm has gone international, it’s a lot tougher for some local government guarantor to try to tear them down by demanding assets as collateral for failed investments at a lower level. The company could very well still not be profitable enough to pay off all of its debt obligations.

I regularly see things I don’t understand in my current working environment. To my amazement, I’ve found that if I dig long enough and find the right person, and convince them to share, I get an answer that makes some level of sense. Of course, the biggest question is why get into private business in China in the first place. People here are brave beyond belief, and risk aversion is nearly nonexistent by western standards.

What does that last sentence mean for the future? It means look out western markets, because if China ever creates a safer, easier environment in which private citizens can freely open their own entrepreneurial endeavors, we’re going to be competing with people willing to risk it all on much lower odds than we would.

The Cultural Revolution and Operations Management.

Posted in Uncategorized with tags , , , , , on December 6, 2013 by Ben Brown

I try to keep these posts fairly brief. People have limited attention spans. I read the news and a bunch of online magazines on a daily basis, but rarely get to the end of an article unless it’s really interesting. There is a lot of filler in stories these days.

Since I’m writing today about Operations Management I’m going to take a stab at being concise and efficient.

Those of you who worked in or with Chinese companies will attest to the fact that there is little in the way of operational efficiency at locally-owned companies compared to the cost-cutting, LEAN-focused environments more commonly found in the West.

Why is this?

I have a theory.

In 1949 China started its great Planned Economic System experiment. Money was a thing of the past. The people would work for the benefit of the country and everyone would be able to eat their fill while enjoying the fruits of everybody’s labor equally.

This didn’t work. But it DID cause some long-lasting, and unfortunate, management changes.

The largest impact in my opinion was on operations management.

Let’s use a factory as an example. Chinese companies generally start greenfield operations. This means they buy the newest equipment and install it in the newest factories built on newly-developed land with new utilities and wide, state-of-the-art roads.

So why do they have trouble competing with western manufacturing operations? Some people think it has to do with the education and technical skill of the employees.

I strongly disagree. The company I work for has highly-skilled technical guys who know metallurgy and know casting. They can break a casting down to its barest elements and tell you what molecules can be reduced to make a stronger, better product. The efficiency problem lies in two main areas: Culture and Process Control proficiency. The efficiency problem is exacerbated by two other things: Protection from Competition and the Cultural Revolution.

Since China opened up in 1979, it has experienced largely uninterrupted, recession-free explosive growth. So why reduce costs? A lot of raw materials and natural resources are subsidized by the government. Manufacturing operations open to fast-growing growth rates inside their country and production costs that until recently undercut the rest of the world.

Now that competition is beginning to tighten a little, Chinese companies are (or will soon be) starting to realize they need to improve their operational efficiency and process control systems in order to increase quality and maintain competitive advantage. But it’s tough to do. Across the board at my company, I see management practices with roots in the planned economy days. What are those practices?

1. Set extremely meet-able quotas.

2. Hire more people than you need.

3. Create a bloated budget.

4. Overload your subordinates with paperwork so they can’t siphon off what you’ve padded into your operating budget. 

This resulted in the lazy, high-cost, low-quality labor forces that existed in the 1960s.

China is not nearly as bad today, but I still see a management structure unconcerned about employees spending 20% of their time completing administrative work to prevent fraud because they assume that if more work is needed, people can work overtime. Multiple approval signatures are required to get reimbursed for company expenses. The amount of time required to submit and process reimbursement forms in many cases out-paces the cost to be reimbursed from a quantitative time-to-money conversion. Employees are monitored by a special department that simply does monitoring. Managers are overworked and their subordinates in some cases sit for weeks with no projects because the departments don’t plan operations from an efficiency perspective.

In the coming years, China will start reducing subsidization of natural resources and utilities. When this happens, people with fluency in Chinese and experience in Six Sigma, LEAN, and DMAIC will be highly employable.

Culturally, challenges exist because process control requires low-level employees to have a say in how the factory operates. In China the leaders are considered decision-makers. Companies are structured much more like the military. You do what your superior says because he says you should do it. No questions are to be asked.
The whole idea of process control programs like Six Sigma is that people at every level will be able to give input to how the factory operates in the interest of reducing waste and improving quality by knowing what caused any and every defect.

The Big Emperor Complex.

Posted in Business Culture in China, Doing Business with tags , , , , on December 5, 2013 by Ben Brown

Most people who have followed China’s social and economic rocket-like progression from a third-world, planned economy in 1979 to what it is today have heard of the Little Emperors. These are the the sole children of the one child policy era. They have two sets of doting grandparents and one set of parents who all want the best for their kids. These elders bring new meaning to the American phrase “Helicopter Parent”.

But I’m not writing today about the little emperors. I’m writing about the big ones.

China’s businesses are a complex web of management hierarchy that can (and in my case have) made a foreign professional dizzy. Like in the rest of the culture, there are nuanced rules that go back thousands of years.

I now work in a medium-sized, privately-owned Chinese company. I’ve been here for little over a year. I have spent this time working as hard as they will let me, but also observing closely and carefully what is going on around me. I’ve taken the 19 years of Chinese cultural and historical study under my belt and applied it, along with a master’s in international business and 12 years of western corporate experience, to what I see here. I’ve soaked in events from the perspective of a foreign observer plunked down in the middle of business meetings where, in most cases, I am able to convince people through my language and actions that they can relax and speak freely amongst one another as if there was no foreigner sitting in the room.

What I’ve discovered has astounded me. I have uncovered depth, color, strategy and politics that probably only scratch the surface of what’s really going on. There is a lot to cover. It will take months of postings for me to get everything from the past year online for your perusal. During that time I will learn more. And I will attempt to share everything I feel is pertinent.

The Big Emperors are the CEOs. The companies they own and manage could be any size, but they are the biggest fish in their pond, lake or ocean, and they expect, as social mores here dictate, to be treated as royalty.

In looking at the development of Chinese business culture and structure, one cannot simply look at the last 34 years since the doors opened. That’s not what corporate culture in China is predicated upon. It bears striking resemblance to the legacy of Chairman Mao, who, for all of his anti-Imperialist dogma, embraced and worked ardently to build a cult of personality similar to that of the emperors who preceded him.

The top dogs in China’s businesses are treated like Little Emperors. But since that title is already taken by the CEO’s only child, we have to give him (in most cases it’s a Him and not a Her) the title of “Big Emperor”.

Our company’s big emperor rules the roost with heavily consolidated power, a personal driver, two secretaries, and a gang of employees following him around wherever he goes. So far that sounds a lot like any company on Wall Street. But the difference is in level of reverence. The Emperor in China’s history was top dog under heaven, and his right to rule was bestowed upon him by celestial endowment. CEOs in China who have managed to get through the political morass and succeeded in carving out their piece of the pie feel it is their right to be in charge. They treat their employees very much like property, berating them when the mood strikes, and paying them complements as they please. We are called at any time of the day or night and told where to be, sometimes within minutes of answering the phone. If we are out of town on a Sunday and we hold lower positions close to the CEO, we could be chastised or even fined for not first asking permission to be out of town.

We are, after all, employed at the mercy of our ruler.

I am not writing any of this sarcastically or in any way negatively. This is me being objective as possible in my very subjective analysis of one company in China. My friends, coworkers and wife weigh in regularly on my comments about what I’ve learned working here, so I know I work at a relatively conservative company by Chinese standards. But they’ve also told me that when a Chinese executive gets to the top of his or her own company, he or she sees authoritarian-style rule, power consolidation, and worship from subordinates as part of the executive package. Considering the absolute cut-throat nature of business in China, there are underlying reasons behind some of this. A CEO has to be in charge and hold a lot of power close out of the very real danger they might lose it to someone else.

But it has caused me to re-think everything I know about culture in China, and contradicted a lot of what I learned in graduate school.

My CEO loves golf. Therefore the company has a hand-selected team of employees comprised of quick risers, executive management and Chinese-speaking foreigners (in this case….only me) who are required to attend the driving range in their spare time and practice golfing for free. Since I enjoyed golfing in the States I begged for the chance to join the team.

My first trip with the CEO for an 18-hole round of golf occurred in Chengdu about eight months ago, when the former CEO (now President and GM) of a Canadian company we had just acquired was in town on business. Things went much as they normally do on a golf course.

The second time was a few months later, during a trip to Canada for our first board meeting there. My CEO, the Canadian GM and I hit the links again. A few times during the round my CEO drove his golf cart right up to his ball and got out to hit, even though we were both still behind him. This is a rather severe violation of golf etiquette. I was surprised, because the CEO golfs every weekend. He should know better.

A few days later we got up early and headed to the course for another round before an afternoon flight back to China. This time it was the CEO, an old friend of his from High School who now lives in Canada, and me. I quickly realized we were not playing by the same rules as before.

The CEO didn’t even bother to wait for me. He played the round pretty much as if he was alone on the course. He chatted with his friend and with me, but he never waited for me to hit. In fact, he looked at me rather disapprovingly whenever I did anything that risked holding him up. His friend, who was not a very skilled golfer, had paid for all three of us to play a round on this very expensive course. He started out hitting the ball a few times, but only actually putted on two or three holes. Usually he picked his ball up after hitting it once or twice on each hole, saying “I don’t want to hold you up, Mr. President”. I, however, was trying to get a round in. So I continued to drive as quickly to my ball as the cart would take me and whack at it with no practice swings as soon as I got there just to keep up with the CEO.

Eventually the friend rode with me in my cart for a few holes and admonished that I should just be picking up my ball and deferring to the CEO. I should also be trying to not hold him up but make every attempt to hit the ball weakly and not as accurately as him. Furthermore, I should tell a few more jokes and make myself the butt of his if I can find a way to do it. “He’s under a lot of pressure. This is his way of relaxing. You’re not here to have your fun. You’re here to assist him in having his.”

I still played every hole, but I stopped going to look for badly hit balls, and sometimes had to rather comically throw a ball ahead of me as I approached an OB marker, jump from the golf cart, club in hand, and whack hurriedly at my ball.

After that round I started to see that the idolization of our CEO happens at every level, and trickles down as well. Heads of departments are treated like generals in the imperial court, and if they don’t like you a promotion will never come. So people agonize over pleasing as many people above them as possible.

I get away with a lot, because I’m a foreigner. If I tried to insist I be treated like everyone else I probably wouldn’t last long here, because I make a lot of cultural mistakes on a daily basis. Thankfully, most of them are minor these days. I’ve already committed all the big ones. But at the same time I get rewarded for saying and doing the right things. And when those compliments come, I don’t ever forget them.

This is all very formulaic, to be honest. For example, the last trip to Canada we met with a high-level Toronto head of the Canadian operations for a Chinese bank. As we were on the elevator to the lobby after the meeting, I commented on how nice their office was. The banker then said, in Classic Chinese self-deprecating form, that it was too bare. The walls lacked artwork and they still had a lot of work to do.

I commented that with such a great space selection on the 28th floor overlooking all of Toronto and Lake Ontario, the banker had negated need for fancy artwork on the walls.

The CEO and the banker laughed and lavished me with compliments on my understanding of Chinese cultural appropriateness.

A couple of weeks ago I ran into a similar situation at a dinner with a government official who, during the course of conversation with me decided to claim that western eating utensils were more refined than holding two pieces of wood together. I knew immediately the appropriate response was to state he was decidedly right (disagreement is a skill I have yet to master…too complicated and delicate an act to tell someone of higher rank that they are wrong), but that chop sticks carried with them more culture and tradition.

Wading through a career that involves regular work with Chinese executives is difficult. If I could narrow this long post down to one sentence, it would be this: To deal effectively with Chinese executives, it’s probably best to read about Chinese emperors.

Recap #1. Arriving in Chongqing.

Posted in Uncategorized on July 17, 2012 by Ben Brown

I planned to start a blog about Chongqing the moment I returned to my favorite super-city. Then I got here and immediately got sick from all the smog. Then I didn’t have internet for awhile. Then I didn’t have a proxy server. Then WordPress decided it was going to time out indefinitely every time I tried to register a new blog URL. 

Those are all of my excuses. 

Now that everything has come to pass, I’m finally able to begin posting a nice, insightful (hopefully), funny, self-deprecating (definitely) account of my days here in Chongqing. Some things have been great. Most things have been great. Some things have been absolutely nightmarish. I expected both things to happen. 

When living in a foreign culture, especially one as totally different from my own as China’s megacity is to Long Prairie, MN, every experience seems to lean towards the extremes.  When something goes my way I feel ecstatic. When something bad happens it’s an absolute nightmare. The one saving factor is that even when things go bad I’m learning a lesson. Sometimes it’s a painful lesson involving urgent dashes for squatter toilets. But it’s always a lesson. 

First things first I guess. 

I arrived in Chongqing from Beijing with a huge, 49.9-pound bag, a laptop, a backpack and a camera bag all strapped in some way or another to my body. I hopped on the recently operational monorail that took me on a smooth trip from the Chongqing airport to somewhere further into the city. On the monorail I struck up a conversation with a guy who worked at an American company. I can’t recall the name of the company. He didn’t speak much English but we got to have a nice conversation about why I had so much luggage. The monorail was packed so I told him that since we were standing so close to each other we might as well become friends. 

I got off the monorail at the HuaXingJie station, I now recall. I got off at that station because I was standing near the door on the right side of the train and for the previous three stops the left side doors had opened. I was afraid I’d get to a station where I needed to exit or overshoot my target and would not be able to drag my massive load of luggage through the sea of sardines and out the other side. 

I got lucky. I exited, took a flight of steps up to the street level and found a bus stop. The first bus was going to ChaoTianMen, where my hostel was located. 

After riding the bus to ChaoTianMen I walked for what seemed like an hour and found my hostel. It was a cozy place with an outdoor, second floor patio looking over the river. There was a general meeting room inside, a washing machine and three showers at the end of the hall. The rates were around $6USD per night. 

It was a great way to start a new adventure. 

I’ll try to update often until I catch up to the present. 

China’s Domestic Economy.

Posted in Business Culture in China, Macroeconomics with tags , , , , , on July 5, 2011 by Ben Brown

Chongqing Tree Economic Growth
I know this is going to sound a bit repetitive to the few who have read most of this blog, but China’s domestic growth and economic strengthening is the key to its future viability as a world economic power.

Macro-economic studies, to me, are fascinating in that while the answers to a country’s problems are not always simple, the actions that need to be taken to solve potential challenges to growth are usually quite common and should not be theoretically difficult to implement.

China has boomed since about 1993 or 1994 as a direct result of initiatives implemented by the government to attract foreign direct investment and create jobs through an economy focused on becoming the world’s manufacturer. One of the truly amazing aspects of China’s growth is the speed with which it has accomplished this goal.

All economies, from the world’s largest by population to the world’s smallest, go through stages. China cannot continually grow its GDP at 8-12% annually by simply being the world’s manufacturer. There is a point at which export-focused manufacturing will slow. Once a country is making a large percentage of the world’s mid- to lower-value goods, it will need to have other parts of its economy growing in order to have any hope of sustaining GDP growth at a pace sufficient to continue employing its workforce.

I’m not pretending to tackle all of China’s challenges in one blog. I should probably change the title of this entry to something a little more pin-pointed, like “The role of Chongqing in China’s domestic growth strategy”. I posted about a year ago that China needs to create an environment highly conducive to entrepreneurial start-ups and small businesses. I still believe this to be true. It is one of the main drivers of domestic growth in all developed countries.

Chongqing, and the rest of China, need to create two main things:

1. A stable social support network (health care, social security programs) so that its people will not hoard all of their savings for retirement at a point in their lives when their spending should be supporting the domestic economy.

2. An open economy where people with dreams of starting a small business have access to financial products so they can succeed or fail at their endeavors. This would mean modeling domestic economic policy after the most successful models out there and tailoring them to China’s specific growth needs. A great way to do this is to analyze the IMF’s annual report on ease of doing business in countries across the globe. Where is China ranked low in comparison to the rest of the world’s growing economies? How can it revise its policies so that those rankings increase? This is just one example of how China can really benefit from macro-economic policy.

In the 1980s, according to Huang, Ya Sheng (Capitalism with Chinese Characteristics), China allowed small credit cooperatives in an effort to provide financing for rural start-ups. It needs, in my opinion, to allow for this again. Either that or the big banks in China might want to start focusing a portion of their available funds on start-ups. At the same time China’s central government should direct the local governments to crack down more on intellectual property enforcement. Because of its entry into the WTO, China already has IP regulations in place. It’s part of the requirements for joining the organization. But it hasn’t been enforcing them. This puts a damper on Chinese ingenuity and new technological advancements.

There are a lot of other factors, I know, but that’s my point about macro-economics. In my opinion the answers to any country’s growth challenges, especially if it’s not currently in trouble, are fairly simple. It is the implementation of these changes that can potentially dampen fast-growing economies.

Please feel free to comment on any of my postings. I learn a lot from the feedback.

An update after a long absence.

Posted in Business Culture in China, Cultural Observations. on July 2, 2011 by Ben Brown

Yao Wei and Shen Hao
In March I took my first trip to China since 2008. I got to visit many friends, including Yao Wei and Shen Hao (Pictured above. We’ve been friends since 1994, when I first went to China).

The trip in 2008 was my first since 2001, so the changes I witnessed then, as the paralympics were wrapping up in Beijing and the whole country seemed mesmerized by the afterglow of its Olympic-hosting accomplishment, far outnumbered the Changes I witnessed in 2011.

But I was amazed at how much Chongqing had changed in those two years. The Jiefang Clock Tower was still in the same spot, and most of the large buildings in that square were still the same, but there were other stunning changes.

I went to meet an old friend from 2001, who had returned to China from Alabama years ago to continue teaching in China. He told me to meet him at Starbucks. I went to the wrong Starbucks. When I was living in Chongqing in the late 90s, it would be impossible to go to the wrong Starbucks. There were none. One could also not go to the wrong McDonald’s (no McDonald’s) or the wrong KFC (only one KFC).

There was only one Ferrari store in Chongqing, but I currently live in Minneapolis, where there are no Ferrari stores.

I went to a bar with some friends called the Shark Bar. It’s real name was something else, but that’s what everyone called it because it had a huge tank running the entire length of one of the 12-foot-high walls of the bar with three or four live sharks swimming around in it. When we were parking in the garage two souped-up Porsches entered.

I guess what I’m trying to say is that Chongqing’s development has been massive. It’s growth, although I haven’t looked up the exact numbers, must be at percentages approaching or surpassing what Shanghai did from about ’97 to ’08. Chongqing has a monorail. It has a port that can accept ocean-sized freighters. It has an economic development zone. It has a booming real estate market and a vibrant manufacturing sector. The city is quite simply stunning to look at. I can’t wait to go back in the next few months to see it again. I can’t wait to go back and live there, and work in a professional capacity.

One thing that hasn’t changed much is the attitude of the people I met there. My friends had not changed. We spent six wonderful days together and they tried to convince me to move back. They didn’t really need to try at all. When I stepped off the train from Chengdu and saw them at the station, I was already convinced.

China’s growth faces many challenges over the coming decade. They’ve got to figure out how to develop their domestic economy enough to sustain the natural slowdown of a very much matured export-oriented industry. They need to bring up the level of domestic support programs so that their consumers will spend more. They need to develop jobs at home, from within. They need to have more foreign businesses in China that focus on China’s market rather than simply manufacturing things for export. This is all happening, but it needs to happen faster. The banks in China need to provide entrepreneurial, small-business development loans. They need to allow foreign competition to freely enter without throwing up blocks to competitiveness so that the local talent will rise to the top and won’t fall victim to the fate of artificial, protected growth.

I think all of this will happen. The government wants an economic powerhouse positioned to compete with the rest of the world. The people want opportunities to develop their careers and move ahead. I’ll write more on my opinions about China’s domestic growth soon.

CQ Brew

Come out to Testbed 2 at E'Ling for a craft beer and a great view of Chongqing 来鹅岭印制二厂,享受精酿啤酒,吸引完美的环境

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